Record low cash levels have been shown to occur at tops, while record high cash levels occur at lows. Hedge funds are all-in and swinging for the fences in order to survive.

ZH notes, 'Bank of America admits that its analysis does "not include derivatives, which are potentially a larger source of exposure and leverage." This is something we covered back in April when we explained who are "The Most Levered Hedge Funds" showing how off the books leverage can make a $15 billion AUM hedge fund like Citadel manage $142 billion in "regulatory" assets.'

When an entire industry senses doom, it can do some crazy things. Like a gambler trying to win back a paycheck, hedge funds seem to be trying to justify high fees in a low-volatility environment by increasing the size of their bets. This could add fuel to the fire should anything unexpected come along from Janet & Co.

Hot & Cold data of late have her in a corner.

The market will probably sleep until 2 pm today when the Fed decision comes out. Overnight the e-mini traded in a 3.5 point band. Yesterday the cash S&P missed the 1943.89 gap by a mere 20 ticks. There is still potential for a spike higher on post-Fed volatility even to the 1950.79 gap.

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